Protect your money: Here's how to research your broker
23.05.12
A: Gone are the days investors would just get a suggestion for an brokerage at the barber shop and end the research there.
Thanks to a variety of free tools available online, investors can do incredible due-diligence on their own of different online brokerages. Even if you don't have financial experience, you can take some basic steps to make sure your broker is on the up-and-up. Since you'll be entrusting your money to the firm, you owe it to yourself to follow just a few basic steps to check on your broker, including:
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• Verify SIPC membership. The Securities Investor Protection Corp. is an entity that helps protect the financial interests of investors. But in order to protect you in case of a problem, your brokerage firm must be a member of SIPC. You should always confirm independently that the brokerage firm you've given your money to is a member in good standing with the SIPC. Don't take the brokerage's word on this alone. Check yourself.
Source: USA TODAY